California Employment Law Update – August 2018

August 27th, 2018

Milpitas Wage Theft Ordinance

On March 20, 2018, the Milpitas City Council adopted Ordinance No. 295 to protect Milpitas workers from wage theft. Wage theft is the denial of wages or employee benefits that are rightfully owed to an employee and includes the failure to pay overtime, minimum wage violations, employee misclassification, illegal deductions in pay, working off the clock, or not being paid at all.

Under the ordinance, the city has the authority to revoke or suspend the business license of any employer who refuses to pay workers when found in violation of wage or hour laws by a local, state, or federal agency.

Note: The city also requires employers to conspicuously post the Wage & Hour Law Guide.

Troester Decision Interprets De Minimis Doctrine in Favor of Compensation

On July 26, 2018, the California Supreme Court decided in Troester v. Starbucks Corporation that the federal Fair Labor Standard Act (FLSA) de minimis doctrine does not apply to claims for unpaid wages under Cal. Labor Code §§ 510, 1194, and 1197. The de minimis doctrine applies the adage de minimis non curat lex, or “[t]he law does not concern itself with trifles.” Federal courts have applied the doctrine in some circumstances to excuse the payment of wages for small amounts of otherwise compensable time upon a showing that the bits of time are administratively difficult to record. The California Supreme Court held otherwise. In Troester, the employee was required to complete store closing tasks each closing shift that added four to 10 minutes to each day. The de minimis doctrine would excuse wage payment for small amounts of otherwise compensable time if the employer could demonstrate the moments would be administratively difficult to record (and thus, pay).

The court held that those four to 10 minutes were not covered by the federal doctrine but rather:

The relevant California statutes and wage order in Troester have not incorporated the de minimis doctrine found in the FLSA.

Although California has a de minimis rule that is a background principle of state law, the rule is not applicable in Troester. For example, application of a de minimis rule is inappropriate when “the law under which this action is prosecuted does care for small things.” (Francais v. Somps (1891) 92 Cal. 503, 506.) The court observed that in Troester, the regulatory scheme of which the relevant statutes and wage order provisions are a part is concerned with “small things.” For example, California law ensures that most nonexempt employees receive two daily 10-minute rest breaks (Wage Order No. 5).

Lastly, the relevant statutes and wage order do not allow employers to require employees to routinely work for minutes off the clock without compensation.

The court did not decide whether there are wage claims involving employee activities that are so irregular or brief in duration that it would not be reasonable to require employers to compensate employees for the time spent on them.